Jamie Bundren of the Kentucky Cabinet for Economic Development (CED), in particular, discussed the Kentucky Small Business Investment Credit Program, which allows small businesses that pay taxes to apply for a state income tax credit.
“If a company doesn’t perform, they don’t get the benefits,” Bundren said. “So it’s really performance-based, and the taxpayer isn’t simply giving away money. If they do what they say they’re going to do, they’re going to get the incentives.”
The program web site states that there is a statutory limit of $3 million per state fiscal year, and that the program in question provides a nonrefundable state income tax credit of between $3,500 and $25,000 for small businesses that “create and fill one or more eligible positions” and invest $5,000 or more in what is called “qualifying equipment or technology.”
One of the guidelines, Bundren said, is that a small business has to keep at least 85 percent of its employees to be eligible for the program. He also said that for the purposes of the program, a small business is defined as having 50 or fewer full-time employees at the time of the application.
The position has to be filled for a year, must pay at least 150 percent of the federal minimum wage and must be subject to individual income tax, Bundren said. He added that the employee is let go less than a year after being hired, the business can still be eligible if the position is filled within 30 days.
Bundren said that qualifying equipment includes computers, furniture, fixtures, buildings and other property purchased for the business.
Applications have been accepted since January, but businesses that are engaged in illegal activity, businesses that have defaulted on any taxes, businesses that present “live performances of a prurient sexual nature,” businesses that engage in religious indoctrination and businesses that get more than half of their incomes from lobbying need not apply, said Bundren.
The web site states that the highest ranked applications will be selected for submission to the Kentucky Economic Development Finance Authority (KEDFA) for final review and approval.
More information on the program is available at www.thinkkentucky.com/KSBIC. Bundren also said to call the CED’s Small Business Division at 1-800-626-2250 for answers to further questions.